Tuesday, May 31, 2016

Phone Scams, the IRS as Bogeyman, and Republican Opportunism

Last week, I retrieved a voice mail message from my home telephone line. The speaker sounded as if English was his second language, and it was clear that he was reading the following words:

"Hi, this is Officer Ron [or maybe Loren?] Schneider [or maybe Snyder?]
from the IRS Department. The reason for this call is to inform you that
the IRS has issued an arrest warrant against you, and your physical
address is under federal investigation. So call me back to get the
detailed information about your case. My call-back number is
646-630-8992. I repeat, it's 646-630-8992. It's very important
important we hear from you today. Thank you."

I knew that it was some kind of scam as soon as I heard the words "IRS Department," which is as much of a tip-off of an ill-informed con artist as Ted Cruz's "IRS Code" nonsense. A quick reverse phone lookup on whitepages.com confirmed that this is a known scam, with my entry of that phone number producing the following warning: "Scam or Fraud, Flagged as
Irs Scam." Mystery solved. Even so, this incident brought up a few thoughts about the nature of these scams as well as the Republicans' ongoing attacks on the IRS.

I conferred with a couple of friends about that voice message, and one friend -- OK, it was Professor Dorf -- told me that both he and his father have received similar calls on their landlines. One reasonable theory is that the scammers call landlines as a means of targeting only old people. (Let's face it: Whether or not a person has a landline is a very good sorting mechanism for age.) Going after old people is creepy, of course, but preying on the weak and especially the old is what scammers have done for as long as there have been scammers.

Although that message was obviously part of a scam, it was not obvious how the scammers intended to make their money. Were they going to say
that there had been an audit? Interestingly, Professor Dorf had followed up on the call after he received such a voice mail. Here is Professor Dorf's recollection of his call:

Answer: IRS.

Me: Hi. Can you tell me where I can get a form 1040EZ?

Answer: What?

Me: This is the IRS, right?

Answer: Yes. Do you want to pay your bill now?

Me: No. I want to file my taxes. How do I get a 1040EZ?

Hangup.

So, I am almost disappointed to say, there was nothing sophisticated here at all. Presumably, if someone returned the call and said that she wanted to pay her bill, she would be told to pay some random dollar amount, and there would then be a script to deal with anyone who said that the amount was too high. It was simple: Give us money, because we're the IRS (Department).

This call, again, was obviously not from the IRS, not just because of the weird word choices, but simply because the IRS would never do anything like this over the phone, and the Service would never, ever reach a point of issuing an arrest warrant without having gone through an incredible amount of due process.

However, this is not something that most people know, and claiming to be the IRS takes advantage of the ability of the mere mention of the tax agency to instill fear in the minds of the scammers' targets. Especially for a confused older person, who frequently sees ads on late-night TV for sketchy companies telling people, "Don't be another IRS victim" (I am not making that up), saying that the IRS is calling is potent and scary. Of course, it is a good thing when people feel that they must pay their part of the cost of living in a civilized society, but the vilification of the IRS leads to unreasonable fear.

The level of unfounded fear in the public's mind is actually quite fascinating. For example, a clinical psychologist once asked me whether one of her clients could be jailed for not being able to pay his taxes. (Her client was a substance abuser whose treatment was not going well.) I pointed out that we have abolished debtors' prisons, and I assured her that the IRS was not going to throw her client in jail simply for being unable to pay his taxes. (Speaking of debtors' prisons, we do know that far too many -- which is to say any -- local jurisdictions have set up systems of cascading fines that regularly lead to poor people being jailed. But this is a Ferguson-like problem, not something that the IRS does.)

All of which is part of the more general atmosphere in which Republicans have chosen to attack the IRS rather than to fund it adequately and then exercise reasonable oversight. Just last week, the Government Accountability Office published findings that the IRS (and many other government agencies) are saddled with archaic information technology. Indeed, the master files for both individual and business taxes are written in "assembly language code—a low-level computer code that is difficult to write and maintain—and operates on an IBM mainframe" (Table on p. 2). These 56-year-old systems need to be replaced, but the IRS does not have the budget to do so anytime soon.

Yet in the eyes of Republicans, this is proof that the IRS is at fault. Now-Speaker Ryan's previous post was Chair of the House Ways & Means Committee, where he presided over an absurd bit of political theater regarding the IRS last Spring. The Republicans' bright idea was that the IRS is deliberately trying to provide bad customer service, and that it had gone out of its way to squander money on previous computer upgrades. Ryan and his party continue -- with evident success -- to try to convince people that the IRS is horrible, as a means of convincing people that taxation is bad.

Who cares that the Republicans need to destroy the system to achieve their goals?

The fact that it's so implausible in the message is actually a feature not a bug. Scammers want to induce only the most gullible and confused people to call them back, because the initial call leaving a message is extremely cheap, whereas the call back to convince them to pay is relatively expensive, because a real live human needs to be on the other end of the line, sometimes for multiple phone calls.

It's much better for scammers to have a lower volume of callbacks, and even a lower number of eventual victims, if they can greatly reduce the number of people who call back, talk to them for an hour, and get suspicious at the last second and balk. These late balkers are also likely to be angry enough that they were almost fooled to complain to the real government, and to have enough evidence to allow agencies such as the FTC to actually track down the scammers.